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AltaRed

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Everything posted by AltaRed

  1. Use the Capital Gains and Losses (or losses) entry option instead of T5008 entry. It is the third 'check box' in the Investment Income and Expenses sub-section. Remember to put in CAD equivalent for all your data, using the USD/CAD forex rate based on the day of transaction.
  2. I don't understand why anyone would want to do that. UFile orders them in type of tax slip but there is no reason to put then in any other order.
  3. How many have you entered so far? When you click on the + sign at the end of the T5008 line, do you not get another blank page to use? AFAIK, the allowable number (dozens?) would exceed anything that any investor could possibly have. If not, then double up by combining T5008 tax slips together to reduce the number.
  4. In the T5008 input form.... in Boxes 11, 13, 13-21 as appropriate. The sum of cost or book value goes in Box 20 and the proceeds of disposition go in Box 21. Recommendation: In the future for keeping track of adjusted cost base data it would be easier to use something like https://www.adjustedcostbase.ca/ for this data, tracking it as you go day to day, week to week.
  5. No, you don't have to use the T5008 entries at all. I never use them. I enter my own acquisition (ACB) data and disposition proceeds in Schedule 3 which is the third line in the Investment Income and Expenses sub-section. T5008 data is prone to error and misuse. By definition, those Schedule 3 entries will use the same disposition data as the T5008 EXCEPT for any transactions done in USD, in which those values have to be multiplied by the forex rate in effect on the dates of the transactions, i.e. the forex rate on the date of acquisition, and the forex rate on the date of disposition.
  6. This attribution issue is, in reality, all over the map. I suspect a tax accountant would say that a significant percentage of couples don't even know what 'attribution of income' means and automatically split joint accounts 50-50 since time began (to Curmudgeon's point really). Ignorance is bliss so to speak and I suspect CRA knows that and sees it on a regular basis and ignores it...especially if the tax leakage is minimal. In other words, a couple that has relatively balanced incomes within maybe a third of each other (my guess only as an example), CRA sees that as equitable enough to let 50-50 in $30k of investment income go by. However, I would guess that if one person was earning $200k and the spouse was earning $50k and the tax returns were showing a 50-50 split in $100k of investment income, that CRA would come calling for documentation to prove the case. CRA computers have algorithms to flag certain types of patterns for further review by a human and I doubt any one really can guess what those flags are and when they are triggered. I decided decades ago not to invite the possibility of our tax returns being flagged so I kept good records about whose money was invested where. Others may choose differently.
  7. Informed opinion from 2 decades of being involved in financial investing and tax matters, but not a licensed professional. Your situation is common to almost every couple who has invested disproportionately over time and have not otherwise taken advantage of methodologies such as spousal loans to re-balance attribution over time. It won't change unless you can disproportionately 'withdraw' assets attributed to you specifically over time in your retirement. What could have been done a long time ago when you and spouse were making investment contributions, is for you to disproportionately spend your income on household operating expenses while your spouse contributed the bulk or all of her 'net' income to the investment portfolio. That is perfectly within the rules. Example: You earn $100k while spouse earns $50k. If household expenses per year were $50k, you could have paid them all, allowing each of your spouse and self to contribute $50k each to the investment portfolio making it 50-50 all along. You could also have funded a spousal loan where any returns your spouse earned on the loaned money would become the property of the spouse....and all your spouse would have had to do is to pay you interest on the loan at the CRA prescribed rate. This link provides a concise explanation of various ways to level the playing field. https://www.mondaq.com/canada/capital-gains-tax/675958/the-tax-attribution-rules-a-response-to-income-splittinga-canadian-tax-lawyer39s-guide The problem at this point is that you have been filing on an 80/20 basis for a definitive amount of time. You just cannot arbitrarily now re-allocate 'ownership' without doing things like spousal loans if you want to be legitimate. I would not want to try and finesse it and then have CRA query and ask for documentation. Tax evasion (even if small potatoes) is not worth the risk in my opinion. P.S. Be careful of what any CRA agent on the phone tells you. Most of them give erroneous information and you could get 5 different answers from 5 different agents.
  8. I agree with Curmudgeon. The attribution continues into perpetuity. You could force a 50/50 split by getting a divorce and having a 50/50 Division of Assets but that would be a bit extreme.
  9. Acquisition and Disposition dates are likely not critical but you will likely have to fill out (or validate) the Acquisition Cost amounts for each transaction anyway, in order to calculate capital gains/losses, so why not? T5008 tax slips should have no entries in Box 20 (Cost/Book Value) and you have to fill that out yourself from your own records (Trade Confirmations, Annual Trading Summaries, etc). If your T5008 does include Box 20 Cost/Book Value from your brokerage, it is still your responsibility to be sure those entries are right. Brokerages will (should) have a disclaimer regarding Box 20 on their T5008. UFile will calculate capital gains/losses as long as you have both Acquisition and Disposition data entered in each T5008 entry line.
  10. UFile will calculate the right amount if you input the right date for 'entry to Canada'. This link https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/newcomers-canada-immigrants.html is a good guide for newcomers (first year in Canada). Added: You will receive full credit for non-refundable tax credits like personal deduction if you meet the 90% rule. See https://www.taxcycle.com/documentation/t1-personal-tax/couples-families-and-dependants/immigrants-emigrants-and-non-residents/ I think the software should determine eligibility.
  11. I don't understand the term 'tax slips' from your post because there are no tax slips per se.....except for a T5008 which is what you may be referring too. If you have included all the transactions in the Capital Gains (and Losses) section of the software, including acquisition cost (and date) and net proceeds (and date), in CAD funds, Ufile does the calculation for Schedule 3.
  12. UFile doesn't know this is a 'one off' event so it is making the assumption that if you have more than $3k in Balance Owing in tax for 2020, your income for 2021 will be similar, and that CRA will similarly believe the same and require you to make installment payments. UFile is advising that as a public service but it is not the official word on that. You will need to wait until about August of this year to see if CRA actually sends you a notice to 'make installment payments' and if so, it will have calculated the numbers for you to pay on Sept 15th and Dec 15th. That all said, there are 3 options you can take at that time for installment payments: 1) accept the CRA numbers and pay and then recover same as Refund owing April 2022, 2) prior year option, and 3) current year option. All as explained here https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/making-payments-individuals/paying-your-income-tax-instalments/you-calculate-your-instalment-payments.html You can decide at that time which option to choose.
  13. Not for Schedule 3. You have to manually calculate the CAD equivalent for both the acquisition cost on the date of purchase of the stock and the date of sale of the stock. The forex rate in effect on the date of purchase cannot be the same as the forex rate in effect on the date of sale, except by extraordinary coincidence. Use the Bank of Canada site to find the forex rate for both dates. The annual forex rates do not apply. In the case of T5 income, UFile allows you to enter all USD income in USD and then to fill in the box for forex, in this case 1.3415. CRA allows you to use the annual forex rate for recurring income such as dividends and distributions.
  14. Ass I have posted in another section, it has been historically correct (or commonplace) to allocate contributions made in the first 60 days of the year, e.g. Jan 1-Feb 28 2021 apply, in whole or in part, to the prior tax year 2020, or to the current tax year. That may no longer be the case (to be confirmed) but in this instance, just do a manual override as noted by TheTaxSmith to limit how much of the 2021 contribution applies to the 2020 tax year. I did this on a regular basis for some time (and ignored the UFile warning). At one time TurboTax (or as it was known before as QuickTax I think that I used in the 1990's) had an option to allocate the split. I have no idea what other software does today. In any case, it seems prudent for some research to be done to clarify whether the rules have changed at some point in time. It has been years since I made a RRSP contribution.
  15. I always contributed for the current year, e.g. 2021 as early as Jan 2, 2021. There never was a question from CRA about that. I agree that might have changed. I still see articles saying that is acceptable but have not gone to CRA site to validate. Regardless, for the purpose of this thread, the OP should just do a manual override (in the software) to limit the amount attributable for 2020 and allow the contributions made in January to be carried into 2021.
  16. If I recall correctly (been some years since I was doing RRSP contributions), I ran into the same problem. I think the response was to ignore the warning since the software doesn't know for which year you are making the contribution. Alternatively, I believe I used to not input the Jan/Feb contribution amount in the software if it was indeed a current year, i.e. 2021, contribution. As long as you are only taking the right amount of deduction, you are fine. You are correct that you can start contributing to 2021 deduction limit on Jan 1, 2021.
  17. As posted by Curmudgeon, there is nothing to be reported on tax returns as regards transactions in a TFSA. Nothing at all. The issue that has arisen in the past was some people (professionals) started trading their TFSAs like professional day traders, and they ran up their TFSA values to significantly large values which attracted the attention of CRA. When they investigated, it wasn't the value of the TFSA that turned out to be the issue. It was HOW the TFSA was used to get to high values. CRA declared it being run as a 'business' and a business cannot have a TFSA. So everything was declared an invalid TFSA and everything became taxable business income. The average amateur taxpayer, even as an active trader, is not likely to run foul of their TFSA being declared business income. Firstly, it would need to be a focus of one's effort for 'self-employment type' income and the taxpayer would likely have to possess some credentials, experience or education or both, in applying techniques and tools to spin the TFSA into a successful business
  18. If the disposition proceeds is already reported as 'net of commission', then the entry in the cost of disposition is zero. Don't put an entry in the commission line. Some brokerages present T5008 disposition data net of proceeds (no entry in disposition line) while others show gross proceeds (commission needs to be added in the disposition line).
  19. There is no taxation (and no reporting of transactions) of any kind within a TFSA account. That is why it is called 'tax free'.
  20. There have been a number of updates to the software over the past month, but nowhere is there any description on what each of the updates actually achieved. In the interests of transparency, many software products provide a 'revision' or 'update' report for each version. As users of the software, we should be entitled to know what has changed in each update. It may or may not solve a reported glitch by users, or an update might affect data entry. For example, users have reported issues with Maxback optimizations. One such report was on medical expenses not resulting in less tax. Another was on pension income splitting not being optimized requiring manual iterations to find the sweet spot. Some of these are serious shortcomings and as users of the software, we need to know what has been 'fixed' in each update and what is deficient. Confidence in this software will disappear without more transparency. C'mon UFile. You should be better than this.
  21. UFile Maxback contains some flaws that have been exposed in the past, and reported by some individuals, but apparently they have has not been fixed. It is supposed to iterate for maximum benefit (least combined tax for a couple) but something is busted internally. The issue may be related to the lower income spouse losing more in tax credits, such as age amount (for seniors) or medical deduction threshold, than the higher income spouse benefits in lower income tax paid. I don't know where the bust is and UFile needs to work on it. My best suggestion is to run the results two ways: 1) let Maxback decide, and 2) shut pension income splitting off as you have done. If the result is that 1) is better, run with it. If 2) is better, chances are there is an optimum somewhere in between 0% pension income splitting and up to 50% pension income splitting. What that means is DON'T let Maxback decide and run your own manual iterations at perhaps 10% increments between 0% and 50% to find a better optimum. Iterate as you wish to fine tune it to the nearest percentage point if you have nothing better than time and/or are motivated to find the last dollar.
  22. I agree with TheTaxSmith on this. Acquisitions and dispositions of securities are converted to CAD at the BoC rate in effect on the day the transaction occurred (actually day of settlement, i.e. T+2) but CRA will accept transaction date if one is consistent year to year. They are NOT based on the annual average forex rate, i.e. 1.3415. The annual average forex rate IS used for 'recurring income', i.e. distributions and dividends received and tax withheld. The simplest way to think of this is that anything that goes on Schedule 3 (T5008 data) is based on forex in effect on day of transaction, and anything that is included as Investment Income on a T3 or T5 tax slip is based on the annual forex rate. It is problematic for frequent traders to use forex in effect on the date of the transaction because of the record keeping involved. I suppose it might be easier to use monthly rates and CRA will accept that. Techie has the real solution here. Use Adjusted Cost Base at https://www.adjustedcostbase.ca/ to keep track of one's ACB. Better yet: Stop doing frequent trading especially in foreign markets.
  23. I have finally solved the mystery, at least for me. It was my synchronizing software, specifically Dropbox, that caused this message. When I paused Dropbox synchronization, UFile saved without this error message. This 'error message' may also apply to other synchronizing software such as One Drive or Google Drive. Try pausing and see if that works.
  24. In surfing various threads, I found this thread from a few years ago. The culprit appears to be Windows Defender. I will try that solution the next time I am into Ufile. Tried this. Both by allowing the app in Protected Folder Access and by turning Protected Folder Access off. Neither approach worked. I do think the issue has to do with Windows Security and/or Windows Defender though. A vendor IT rep needs to show up and respond to these issues.
  25. Most of the time I still get this message despite no other non-system app being open. Occasionally I do not but rarely. That all said, I have been inputting data and it seems like Auto Save is working because the data is still there when I open that File again. I guess the bigger question is whether this thing will calculate and save the actual tax return when it is time to Netfile. I would have thought there would have been some response from the vendor by now to this topic. Clearly something is amiss here and the conflict has to be a Win10 system executable of sorts.
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